The concern of the Federal Aviation Administration (“FAA”) regarding the use by airport operators of airport generated revenues to soften budget shortfalls off the airport appears to be growing. In a speech delivered at the November 11, 2019 National Air Transportation Association Leadership (“NATA”) Conference, Kirk Shaffer, FAA’s Associate Administrator for Airports, solicited the assistance of the aviation community in working with jurisdictions on compliance. Mr. Shaffer went on to opine that jurisdictions that operate airports are sometimes unaware of the laws governing revenue diversion, or confused by revenue flows, particularly as related to state and local taxes. He illustrated the problem by sharing the fact that, of the 177 jurisdictions with which the FAA has worked over the past five years on revenue diversion issues, 107 still remain noncompliant.

That number of noncompliant jurisdictions is somewhat surprising as the rules governing the use of airport revenues from airports are fairly explicit. The general rule is that revenues generated by a public airport may only be expended for the capital and operating costs of: (1) the airport; (2) the local airport system; or (3) other facilities owned or operated by the airport operator and directly and substantially related to the air transportation of passengers or property. 49 U.S.C. §§ 47107(b)(1) and 47133(a). The use of airport revenue for purposes other than airport capital or operating costs is generally considered “revenue diversion” and is prohibited by federal law. See Policy and Procedures Governing the Use of Airport Revenue, 64 Fed.Reg. 7696, 7720 (February 15, 1999) (“Revenue Policy”). Airport revenues subject to the revenue use requirements include all fees, rents, charges, or other payments received from anyone who makes use of the airport and from the airport sponsor’s activities on the airport. Id. at 7716.

The third prong provides unique revenue allocation opportunities to airport sponsors that own or operate other facilities.


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In a decision of October 21, 2019, the Federal Aviation Administration (“FAA”) defied its own regulations, federal law, and logic in determining that the City of Santa Monica had properly expended airport revenues in the demolition of 3,500 feet of the runway at Santa Monica Municipal Airport (“SMO”), for the express purpose of limiting access by turbojet aircraft.

In its decision, FAA stated “[w]e conclude that airport revenue may be used to fund the payment removal, pavement pulverization, and hydro-seeding project, including the work within the Runway Safety Area, at SMO. The removal of the subject pavements, pavement pulverization and reuse, and the soil stabilization at SMO appears justified as an airport operating cost.” [Emphasis added]. Existing law and governing regulations would, however, appear to lead to the contrary conclusion.


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The Federal Aviation Administration (“FAA”) relies on the mantra “safety is our business, our only business” where, for example, justifying changes in aircraft flight paths over heavily populated residential communities. But is that reality? Not according to the Office of Inspector General, U.S. Department of Transportation (“OIG”) report of October 23, 2019, Department of Transportation’s Fiscal Year 2020 Top Managerial Challenges (“OIG Report”), when dealing with members of one of FAA’s primary constituencies, the aircraft manufacturers.

Specifically, the OIG Report highlights significant “challenges FAA faces in meeting its safety mission,” p. 1. Most notable is the correction of its lax oversight of aircraft certification procedures as graphically demonstrated by the recent deaths of 346 people in two separate crashes of Boeing’s 737-Max 8 aircraft, at least preliminarily thought to have been caused by systemic malfunctions in computer systems designed and installed by Boeing but never disclosed to operators.

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In a June 19, 2019 hearing of the United States House of Representatives Subcommittee on Aviation, representatives of pilots’ organizations directly involved in, and affected by, the structural issues identified in the Boeing’s 737 Max aircraft, that caused the tragic deaths of 346 passengers, called The Boeing Company (“Boeing”), and its federal regulatory partner, the Federal Aviation Administration (“FAA”) to account in no uncertain terms.

Daniel Carey, a 35 year career American Airlines Captain, and President of the Allied Pilots Association (“APA”), testified as to what pilots regard as the fundamental issues with oversight by FAA.

Carey opines that the disasters arose from two fundamental problems: (1) the addition of the Maneuvering Characteristics Augmentation System (“MCAS”) without additional training, or even notification to pilots of its existence; and (2) failure of the requisite oversight by FAA. First, in an effort “to minimize the operating costs to Boeings customers by allowing the Max to be certified by FAA as a 737,” rather than requiring additional procedures that might be required for a substantial variation from the original 737 design, “this lead Boeing’s engineers to add the MCAS system.” Also according to Carey, many additional mistakes were subsequently made by Boeing engineers.


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The concept of “on call” transportation has now moved from the Earth to the sky. As demonstrated recently at a meeting of the players in Washington, D.C., the future of aerial transportation is transitioning toward “flying cars,” i.e., electric Vertical Takeoff and Landing (eVTOL) craft that hover and glide relatively quietly and without emissions, summoned by “app,” and without the need for a pilot. To accomplish this purpose, companies including Embraer, Aurora Aircraft, Karem Aircraft, Pipistrel USA Engineering, and Bell Aircraft Corporation have launched development of requisite engines and airframes.

In order to achieve the fundamental purpose of this (hopefully) revolutionary mode of air transportation, a number of parameters must be met in developing the requisite airframe, including a cruise speed of 150 miles per hour, 60 mile range, and capacity sufficient to fly three hours’ worth of short (e.g., 25 miles) trips carrying a pilot and four passengers. In addition, the “aircraft” must be able to takeoff and land vertically, like a helicopter, but fly on wings to conserve energy.

Each of the aspiring companies touts a different concept to accomplish these purposes.


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In a March 27, 2019 appearance before the Senate Subcommittee on Aviation and Space, Daniel K. Elwell, Acting Administrator for the Federal Aviation Administration (“FAA”) sought to clarify the FAA’s role in the certification of the safety of aircraft systems. In doing so, he emphasized that the principal responsibility for safety lies with the aircraft manufacturers, with FAA performing merely a review function to determine “if the applicant [for certification] has shown that the overall design meets the safety standards. We do that by reviewing data and by conducting risk based evaluations of the applicant’s work,” Statement of Administrator, before the Senate Committee on Commerce, Science and Transportation, Subcommittee on Aviation and Space on the State of Airline Safety: Federal Oversight of Commercial Aviation, March 27, 2019 (“Statement”). The problem with this explanation may not be the adopted approach, but the lapses in FAA’s realization of its part of the bargain.

In the opening discussion of the safety certification system’s underlying philosophy, the Acting Administrator explained that “the FAA focuses its efforts on areas that present the highest risk within the system . . .,” Statement, p. 3, with FAA purportedly “involved in testing and certification of new and novel features and technologies,” Statement, p. 5, a category within which the Maneuvering Characteristics Augmentation System (“MCAS”), thought to be a cause of the recent accidents in Ethiopia and Malaysia is included. In fact, as discussed in a comprehensive article of March 17, 2019, “Flawed analysis, failed oversight: How Boeing, FAA certified the suspect 737 MAX flight control system,” posted in the Seattle Times by Dominic Gates, the Seattle Times Aerospace reporter (“Seattle Times Article”), Boeing’s “system safety analysis” of the MCAS:

  • Understated the power of the new flight control system, which was designed to swivel the horizontal tail to push the nose of the plane down to avert a stall. When the planes later entered service, MCAS was capable of moving the tail more than four times farther than was stated in the initial safety analysis document.

  • Failed to account for how the system could reset itself each time a pilot responded, thereby missing the potential impact of the system repeatedly pushing the airplane’s nose downward.

  • Assessed a failure of the system as one level below “catastrophic.” But even that “hazardous” danger level should have precluded activation of the system based on input from a single sensor — and yet that’s how it was designed.

Nevertheless, the Acting Administrator goes on to divest FAA of responsibility.


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In recent months, since the tragic crashes of two Boeing 737-Max aircraft in disparate areas of the globe, both the public and the press have expressed surprise at the finding that the Federal Aviation Administration (“FAA”) was delegating to the aircraft manufacturing industry the principal responsibility for formal certification of aircraft safety. They shouldn’t have been so surprised.

The press consistently blames “agency capture,” the process by which federal agencies purportedly develop cooperative, and even symbiotic, relationships with the industries they are tasked with regulating. In fact, in this instance, it was the United States Congress, in Section 312 of the FAA Modernization and Reform Act of 2012 (“FMRA”), that opened the door to the now questioned delegation of authority over aircraft safety.


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Within hours after FAA’s grounding of Boeing’s 737 Max 8 and 9 aircraft, pilots and aviation experts began to weigh in on the rationale. The first in the chorus was the Acting Administrator, Daniel Elwell, who opined that, in the face of the immediate action to ground the aircraft taken by European aviation authorities, as well as the increasing public outcry, the FAA had discovered “new evidence” from the site of the recent deadly airline crash in Ethiopia that justified defiance of the aeronautical industry urging a more measured approach.

Specifically, the Acting Administrator, in an interview with CNBC, stated that information made available since March 13 verified that the Ethiopian airline’s flight track “was close enough to the track of the Lion Air flight” that had crashed in Indonesia in October 2018 “to warrant the grounding of the airplanes so that we could get more information from the black boxes and determine if there is a link between the two, and, if there is, to find a fix to that link.” Ultimately, the agency concluded “the full track of the Ethiopian flight was very close to Lion Air,” and, thus, justified the grounding. The remaining question of what potentially caused the similar fatal incidence was, however, left up to other aviation experts.


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As the popularity of unmanned aircraft systems (“UAS” or “drones”) increases, expanding to such hybrid uses as local air taxi services, the Federal Aviation Administration (“FAA”) has been faced with pressure to loosen existing restrictions on drone operation. The FAA’s initial regulation, 14 C.F.R. Part 107, in essence, gave with one hand while taking away with the other, by prohibiting drone operations under a variety of different circumstances, including a prohibition on operation over people, 14 C.F.R. § 107.39, prohibition on night operations, 14 C.F.R. 107.29, and prohibition on flights over moving vehicles, 14 C.F.R. § 107.25, while providing, at the same time, a process for obtaining waivers of those prohibitions, 14 C.F.R. § 107.200. In its Notice of Proposed Rulemaking (“NPRM”), RIN 2120-AK85, FAA now proposes to allow operations over people and at night without the need for waivers, if the UAS meet certain preliminary standards, and the remote pilot in command conducts the activity pursuant to the proposed rule.

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The Federal Aviation Administration (“FAA”) Reauthorization Act of 2018 (“Act”), passed by Congress on October 3, 2018, devotes an entire section, Title 1, Authorizations, subtitle D, to “Airport Noise and Environmental Streamlining.” Among the 22 provisions enacted by the subtitle, at least 12 deal directly or indirectly with aircraft noise. These provisions almost exclusively require “studies,” “research,” “consideration,” and “reports,” and notably lack, with only three exceptions, any mandate for substantive action.
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